About Me

Thursday, January 19, 2012

Be Like Mitt

"What did I do?"

Republican presidential candidate Mitt Romney came under fire this week for some of the things he had done in a previous life as a venture capitalist with Bain Capital. Let it be noted that his antagonists did not call him a venture capitalist. They said vulture capitalist. According to them, Romney and his fellow raptors made a habit of swooping down on struggling companies, gutting them, and leaving carcasses. It was creative destruction writ large, very large, with "destruction" italicized, capitalized, bolded, underlined, and color-fonted. Pretty coldhearted, but also very American.

Now you, too, can be a vulture capitalist. And you don't even need Mitt's millions. For the price of two cappuccinos, you can buy a share of Bank of America's common stock and rub wings with other shareholders of a similar feather. You see, there is a fire sale going on at BofA, where management is converting to cash anything not nailed down. During 2011's fourth quarter, the company (as we learned from this morning's earnings release) sold an equity stake in China Construction Bank for $2.9 billion and assorted securities for another $2.4 billion. After all that, pre-tax income came to $2.7 billion, which suggests to me that the rest of the business, the part that stays, was losing money.

As Mitt will tell you, timing is everything. If you do decide to fly in for some warm flesh, make sure you are not the last to leave. When they start selling the furniture, you want to be gone already. Just like Mitt.

[update, 01-23-12--]

Go here to see how Mitt and his minions benefit twice from preferential tax treatment.